Wholesale Food Prices Drop Again, Menu Prices Up Slightly

January 6, 2014

Overall food prices at the wholesale level fell for the second month in a row, according the latest data from the Bureau of Labor Statistics Producer Price Index, released Sept. 13. While the index for so-called finished foods rose 0.6% in August, the index tracking prices of intermediate foods and feeds dropped 2.3%, while the crude foodstuffs and feedstuffs index dropped 4.2%.

The National Restaurant Association weighted average of the three measures had not been released as we went to press, but the strong decreases in wholesale prices at earlier stages of processing will undoubtedly lead to the second drop in the group’s overall index in a row. The overall PPI rose 0.3% after showing no gain in July and is running only 1.4% higher for the past 12 months at the finished level.

One heartening bit of news in the PPI data on food was declines in prices for prepared animal feeds and meats at the intermediate level and corn, soybeans and slaughter chickens at the crude level. The lingering effects of last year’s U.S. drought on animal feed prices thus appear to be declining.

On the consumer level, menu prices increased 0.2% and are running 2% higher for the past 12 months on an unadjusted basis, according to the BLS Consumer Price Index data, released Sept. 17. Prices for food-at-home were up only 0.1% with the 12-month gain at a mere 1%. The overall CPI rose only 0.1% with gasoline prices down 0.1% in August. The so-called core rate, less food and energy prices, rose 0.1% as well and is running only 1.8% above a year ago.